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In deciding whether or not to get involved in barter, counter-trade or offset trade, the first question a business owner must ask is: Do I have something to barter? The answer is yes for most small businesses. If they have excess inventory, they have goods to barter. If they are a service provider with the capacity to handle more clients, they have expertise to barter.

Businesses suitability to barter

For a business to be suitable for barter exchange membership it must have between a 30-percent to 35-percent profit margin on the products or services that it intends to offer. This allows the business to make a sufficient margin to reap the benefits of purchasing goods / services at a large-enough discount to make the idea worth-while.

Individuals suitability to barter

Individuals are uniquely suited to becoming members of a barter exchange as they are capable of offering services often fall into the “ad-hoc personal needs” category. Whilst each product or service may not be of a high-value they can add up to a significant amount for a business owner at the end of each month. They also provide the ability for a member to make acquisitions using trade credits that are not readily available through other retail barter exchanges:

Service Professionals

When a business depends on billable hours for profits, every unfilled slot on their appointment calendar represents lost revenue that will never be replaced. Bartering offers these types of businesses the opportunity to:

Turn those open appointments into new customers

Get a steady stream of new clients

Build up your list of happy customers

Receive referrals from customers we bring them

Use our customers as reference sites for more work

Hotels / Motels / Backpackers / Accommodation Providers

Every night forty percent of the hotel rooms across the country are empty, however, these businesses fixed costs stay the same regardless whether those rooms are vacant or not.

Selling empty rooms online using barter makes good sense.

No cost to advertise

No need to discount

Sell only when during down-periods (off-season, cancellations etc)

Attract customers to your business instead of your competitors

Get a steady stream of new clients

Sell previously unsold rooms at full price

Media / Advertising Providers

Advertising is a very perishable commodity. Every unsold advertising spot or print ad cuts directly into your bottom line. With fixed costs and competition on the rise you can’t afford to miss a single chance to build revenue and cut costs.

We can help you reach new advertisers

Fill your unsold advertising space

Take customers away from the competition

No need to discount

No need for costly promotions

Our members pay you instantly – no accounts receivable

Turn a loss into a profit

Deal with a loyal customer-base

Event Tickets / Entertainment Venues

Your barter exchange gives businesses the opportunity to sell event tickets, venue seats and entertainment attraction passes at the last minute as an alternative to discounting.

Once these types of businesses cover their overheads any additional revenue is 100% profit. Through the effective utilization of the barter exchange platform these businesses can attract additional customers without the added burden of increased advertising costs.

Liquidation Stock

Every year a large amount of businesses find themselves with end of line or last seasons stock, incorrectly packaged or returned products and “new” items which did not sell as well as they initially thought they would.

Instead of discounting this surplus capacity, a barter exchange offers its members a way to receive full market value:

No cost to list

Sell at full price

Sellers get paid immediately

Online quotes or fixed-price offers

Offers can be limited by date and quantity

Participants only have to accept the customers they want

Customers are attracted away from the competition

New and trial products have a greater market-reach and, if unsuccessful, they do not cause brand impact – something which could have potentially affected the cash-paying customers

Businesses receive word-of-mouth referrals

Do you want to know more about the Ormita Commerce Network or become a member, joint venture partner or barter exchange franchise owner? Visit our website at www.ormita.com or www.ormitacorporate.com.

Unsold appointment time, empty hotel rooms, unsold venue passes, unfilled advertising space, rapidly depreciating stock, idle production time, vacant seats, end-of-line items and oversupplied products are known as “dead capital” and there is approximately 9.3 trillion dollars of it world-wide.

Barter Provides a Competitive Edge

Business owners in a barter exchange will patronize other members businesses over competition because the barter affiliation is an incentive to do business. Barter also attracts new customers to a business, without affecting the existing cash sales already being generated by the company.

Barter Increases Sales

A barter exchange markets its members to hundreds of local businesses and thousands nationally — all potential customers, incremental business over and above the daily cash-paying customers. Businesses barter to purchase what they need or want, and pay for them with the additional sales of their products or services.

Barter Improves Cash Flow

There are two main ways of to increase cash flow – additional sales and reduced costs. Barter does both! Barter allows business owners for what you need with what they have – allowing them to preserve working capital for other needs. When a business uses barter instead of cash to purchase needed products and services, they reduce their cash costs by paying for them with revenue generated by incremental barter sales. When they purchase something using their barter exchange trade dollars, the payment is made with new sales … sales that probably would not have happened without the barter exchange affiliation.

Barter Moves Excess Inventory & Fills Idle Production Time

Every business owner struggles with the dilemma of what to do with extra inventory or idle production time. Barter provides a tool to put that excess to use in profitable ways. The barter exchange accomplishes this objective by matching sellers products or services with businesses looking to purchase them on trade. It’s a win-win situation.

Barter Means New Cash Sales

That’s not a misprint – yes, cash sales. Every business owner knows the key to success is referrals. If they perform a good job for a client of they serviced though the barter exchange – they’ll undoubtedly refer their cash-paying friends, clients, family and associates.

Barter Means Increased Profits

Sellers within in a barter network make incremental barter sales (over and above their cash business) and increased sales mean increased profits.

Barter Makes Record-Keeping Easy

The barter exchange works much like a bank, providing control, record keeping, and administration for member’s barter transactions. Direct-trading between businesses, often becomes cumbersome at record-keeping time. With a barter exchange’s convenient clearinghouse concept, there’s no need to keep track of the dollars traded. The barter exchange uses state-of-the-art technology to track all of its member’s barter sales and purchases with an easy-to-read itemized monthly statement. Plus, a member website is available to service their barter needs 24/7.
Barter Eliminates Bad Debts

Barter takes the hassle out of collections. When a member makes a barter sale to another client within the barter exchange, transactions are settled instantly.

Barter Creates Wholesale Buying Power

With barter, the real cost of the products members purchase on trade is actually the wholesale cost of the trade dollars earned. Making sales with built-in profits makes the cost of the purchases more economical on trade. When businesses join a barter exchange, they open the door to a new, cash-free way of handling every day business and personal expenses.

Goods and services procured always turn out to be cheaper than they would have been with cash, since there are purchased from the wholesale cost to produce the buyers own product or service (spare time = little cost, products sold = the difference between the wholesale and retail price)

Opportunity to convert excess capacity into cashless donations for which a tax-credit can be received

Realise value from underperforming assets

Trade excess capacity for already budgeted for goods or services

Employee incentives – travel, entertainment, gifts, perks & bonuses

Receive more value than through discounting or liquidation

Conversion of bad debts into needed goods or services

Increase asset base

Add new customers without any additional advertising cost

Increase overall company revenue

Improve shareholder value

Add new product lines which are purchased on barter

Participants can trade regardless of the amount of cash in the community or other external economic factors

Borrower advantages

No interest charged on borrowed trade credits

Purchases are funded through the sale of the borrowers own goods and services (they are obliged to sell their own services to repay the debt)

Loans are provided on the basis of what the borrower can produce / sell – not their current turn-over

Borrowed funds guarantee additional sales for the borrowing group

If a loan is repaid through selling unsold product or spare time then the cost is minimal

If a loan is repaid through selling product for retail price then the cost is higher but less than it would be if the loan was repaid with cash

Increase cash sales

Referrals

Opportunity to convert lost capacity into advertising and marketing

Purchase of additional products on barter for resale in the cash economy

Valued customer give-aways and prizes

Increased market share

More market exposure

Another advertising outlet

Turns downtime into an increased work portfolio

Increased customer base

Increase number of potential word-of-mouth referrals

Greater exposure to the market of your product or service offerings

Expanding market reach

Risk-free method of purchasing / trialling different methods of advertising

Facilitate trade between groups historically not likely to trade

Build new customer bases away in new areas and use these as a base for references and referrals to acquire cash-paying customers

Repeat business

Take away customers from the competition

Suppliers become customers of your business group

Expanded group of customers

Provides alternate revenue sources

Allow for the exchange of goods and/or services in asset-rich, cash-poor communities

Local welfare and sustainability

Local asset protection

Stocks of unused goods become mobilized, people become employed, and those traditionally at the “bottom” of the economy like home-makers, farmers and unskilled labourers find a place in the economy, and through it, in society

Opportunities for local import substitution are increased

Community relations and standards of living improve

Ensures that more local assets stay within the community

Economies of scale, transfer pricing, and capitalising on cheap Third World labour or raw materials enables larger multinational and interstate manufacturers and retailers to tip the so-called “level playing field” in their direction, to the detriment of local businesses

Builds community networks

Because exchanges plug members into a local information network, it provides new or isolated residents living in a local community with an instantaneous community support system, which avoids the embarrassment of introductions to strangers

Local welfare

To recognize, value and develop the abilities and skills of the members

Community wealth is not related to the amount of cash in a community, but the amount of assets, capacity and skills

Promotes local entrepreneurship

By increasing access to asset creation by the poorest members of society, the gap between the richest and poorest members of society is reduced

Officials of the GATT organization, claim that counter-trade alone accounts for around 5% of the world trade. The British Department of Trade and Industry has suggested 15%, while numerous scholars believe it to be closer to 30%, with east-west trade having been as high as 50% in some trading sectors of Eastern European and Third World Countries. A consensus of expert opinions (Okaroafo, 1989) has put the percentage of the value of world trade volumes linked to counter-trade transactions at between 20% to 25%.

Why counter-trade:

Lack of “hard” currency

Desire for bilateral trade relations

A mode of entering a foreign market

The pro’s of counter-trade are:

1.The world debt crisis has made ordinary trade financing very risky.

2.The use of countertrade permits the covert reduction of prices and therefore allows the circumvention of price and exchange controls.

3.“You scratch my back and I’ll scratch yours” – Bilateralism

4.Excellent mechanism to gain entry into new markets

5.Countertrade can be a good way to attract new buyers.

6.Countertrade also can provide stability for long-term sales.

Counter-trade is generally conducted between governments, large corporations,consists of several different types:

Barter

The direct exchange of goods or services of approximately equal value.

Not used very often because difficult to find goods of equal value.

Assessing value and disposing of goods is also a problem.

Swap / Parallel Barter

Both parties sign two separate contracts that specify the goods and services to be exchanged between them at different times.

Counter-purchase

Seller gets paid but agrees to purchase goods worth the same amount from the buyer.

This form of counter-trade provides the participants more flexibility in selecting goods and in assessing value.

In this way one transaction can go forward even though the second transaction needs time.

Buy-back or Compensation

One party agrees to supply technology or equipment that enables the other party to produce goods.

Seller agrees to accept as payment a portion of the output or buy it back.

Technology transfer, quality assurance, and assured payment.

Usuallyutilized in developing or newly-industrialized nations.

Offset

Offset arrangements are designed to offset the negative effects of large purchases from abroad on the current account ofa country. Ex: a country buying an airplace may demand that parts and components be acquired in the local economy.

Used frequently by countries to ensure stable currency flow and employment.

Allows countries and organizations to offset the negative impact of large purchases on balance of payments.

Variations of counter-trade include:

Switch trading

Allows credits to be sold on to a third party

Clearing account barter

As with a retail barter exchange – credits and debits in a barter account with a number of participants

Debt-swaps

Less developed countries with large debt burdens

Debts-for-equity swaps

Debt converted into equity in the debtors firm

Debt-for-product

Debt converted into product from the debtors firm/country

Debt-for-nature swaps

firms or entities buy what are otherwise considered to be nonperforming loans at substantial discounts and return the debt to the country in exchange for the preservation of natural resources

A great deal of counter-trade involves the partial payment of goods or services in cash.

Most emerging market economies have favoured countertrade for economic reasons.

Newly Industrialized Countries favour for competitive reason with countries in Western Europe, Japan, New Zealand, and Australia actively participating and promoting counter-trade.

Do you want to know more about the Ormita Commerce Network or become a member, joint venture partner or barter exchange franchise owner? Visit our website at www.ormita.com or www.ormitacorporate.com.

The following comparison of various types of money in circulation shows the private unofficial issuance of currency is not an entirely new phenomenon across the globe.

This, intra-system claims of local exchange trade associations, such as non-commercial local exchange trade systems, LETS, and commercial barter clubs may, in principle, be seen as a private currency in the same way as some claims (transferable to third parties) on enterprises.However, in terms of their economic significance, the regional currencies are not only far behind the official currency, they also occupy no more than a marginal position with regard to the other unofficial private monies.

Official Currency

Private Unofficial Currencies

FORMS OF MONEY

Legal Tender

Corporate Barter

Community Barter

Corporate Monies

Issuer

Commercial barter exchanges

Local enterprise trade exchanges / community currencies / time banks

Airlines, also

telephone providers,

filling stations,

payback

Type of Money

Banknotes & Coins

Deposit Money

Deposit Money

Deposit Money

Range of Acceptance

Broad. Legal tender with mandatory acceptance.

Formally, only members. Restricted to membership base.

Only members.

Regionally restricted.

Only members.

Supra-regional.

ACCEPTANCE

Universal

Restricted

Restricted

Very Restricted

Payment media

Unrestricted

Formally and only members

Only members

Only members

Circulation

In principle, infinite

In principle, infinite. In practice – limited due to market size.

Only very limited: after media have

been disbursed to

third parties, return

flow to issuer

Unit of Account

Official unit of account

1:1 with Legal Tender. In practice – inflation exists within most due to overpricing in market.

Self-defined. Usually in a time-basis.

Self-defined (e.g. Airmiles, payback

points)

Store of Value

Given price

stability, unlimited

Limited since

mostly subject to

ongoing

depreciation and

extra premium

when redeemed

Yes, but limited

range of goods and

services

Limited. Issuer can

discontinue

programme. Expiry

dates in most cases.

Do you want to know more about the Ormita Commerce Network or become a member, joint venture partner or barter exchange franchise owner? Visit our website at www.ormita.com or www.ormitacorporate.com.

It is created because of over-production and inefficient use of what is produced. Throwing things away instead of recycling or on-selling is one of the major causes of environmental waste across the globe.

Ormita allows businesses to recover the cost, and to make a profit, on their previously surplus or overstocked items whilst maintaining the integrity of both the environment and their own balance sheets.

Time and excess capacity are another priceless non-recoverable, non-recyclable limited commodity. Selling or donating under-utilized time and capacity means greater wealth for the buyer and the local community.

Some other features unique to the Ormita product:

Offers the ability for your company to reduce its waste footprint

Provides a more efficient way to use and dispose of assets whilst retaining their value

Both unsold products and services can be on-sold without loosing their value

Economies of scale, transfer pricing, and capitalising on cheap Third World labour or raw materials enables larger multinational and interstate manufacturers and retailers to tip the so-called “level playing field” in their direction, to the detriment of local businesses. Ormita is a solution to these issues:

As stocks of unused goods become mobilized, people become employed, and those traditionally at the “bottom” of the economy like home-makers, farmers and unskilled labourers find a place in the economy, and through it, in society

Ormita provides an opportunity for local enterprises to sell their products and for communities to reduce the need for imports

Community relations and standards of living improve

Increased local trade helps to ensure that more local assets stay within the community

Building Community Networks

Because Ormita plugs its members into a local information network, it provides new or isolated residents living in a local community with an instantaneous community support system of other entrepreneurs and consumers.

Local Welfare

Community wealth is not related to the amount of cash in a community, but the amount of assets, capacity and skills. Ormita offers a way to mobilise and transfer assets in times when cash is difficult to come by yet allows for pricing integrity to stay the same.

In his book, the Mystery of Capital, Hernando De Soto calls unproductive, unsold assets “dead capital” and estimates there is 9.3 trillion dollars of it world-wide.

Unsold production time, empty rooms, unfilled advertising space, vacant appointment time, depreciating inventory, mislabelled stock, end-of-line items, last seasons merchandise, entry tickets or idle assets are all items which can be donated to non-profit organizations in need.

For some businesses, providing in-kind donations to organizations doing good work in their community is the easiest way they can support you. They may not be able to provide direct financial donations, but it’s far easier for them to simply share resources or expertise they already have.

Unfortunately, due to lack of storage capacity, issues with handling, inappropriateness of the donated item or other logistical issues, many non-profit organizations turn away a constant supply of substantial in-kind donations, most of which end up in landfills.

Ormita offers the opportunity for your organization to accept virtually any in-kind donation and turn it into things that you need.

Using the Ormita trading platform, your organization can trade unwanted in-kind donations for essential goods and services that you need.

There is little to no handling of the products by your organization.

Our staff are courteous and professional and will always treat your donors with respect, ensuring that they will return to your organization the next time they have a charitable donation to make.

We strive to make donating a hassle free experience.

There is no fee for our service to your organization or your donors.

You receive the maximum possible return from donated goods and services.

Our solution is environmentally friendly and socially responsible.

There are billions of dollars of goods and services just waiting to be accessed by your organization through the Ormita in-kind donation program.

What are “in-kind” donations?

An “in-kind” donation is a contribution of time, service or goods made by a donor to help support the operations or services provided by your organization. It isn’t cash. Therefore the donor does retain a degree of control over the donation. This doesn’t occur when a donor gives you a cash donation.

Because of this “relationship”, donors products need to be used effectively and efficiently. They also need to know that their product is not going to end up on-sold to a competitor or an existing cash customer.

Some examples of in-kind donations include:

–Books

–Food supplies

–Medical kits

–Office equipment

–Printing

–Refreshments

–Telecommunications equipment

Why accept “in-kind” donations

1.You can acquire goods and services that you need without spending cash

The cash you save can be used to pay for other products or services that you have not been able to acquire through the Ormita donation process.

2.Expands your capacity

Your organization can suddenly acquire goods and services which you otherwise might never have purchased. More printing, radio advertising, better equipment etc.

3.Builds relationships

Approaching a prospective donor and receiving an in-kind donation provides an opportunity for that person or organization to support your cause without actually investing any cash. If the donor likes how the donation issue is handled, gets a tax benefit or finds that their product is placed in a new market, they may take an even greater interest in the activities of your organization.

An in-kind donation can be the beginning step of a substantial relationship.

4.Provides a way for your donors to continue giving during tough times

An in-kind gift’s market value can be more than double the value of a cash donation from the same donor, since the gift’s cost to the donor is only the product’s marginal cost, which might be only half of its market price.

Moreover, many corporations have spare capacity that they could put to use for nonprofits at a negligible extra cost to themselves; for example, transportation or shipping companies may have spare container space; IT consultancies, temporarily underutilized communications engineers.

§Tax-deductible benefits may be greater than income received from a sale.

§Creates savings in warehouse space, disposal costs and staff time

§If they plan to close or consolidate a warehouse or distribution centre, it may be more cost-effective to donate that inventory rather than move it to another location.

§Helps to reduce waste and meet environmental goals.

§Staff and customers want to see their surplus goods going to people in need rather than to the dump.

§Donated goods are generally only deductible at cost (not market value). Using the Ormita In-Kind Donation Program their donation is eligible for a tax deduction at full retail value.

§Ormita effectively converts items which a charity may not be able to directly use into goods and services they need.

§A single email or phone call to Ormita can take all of their surpluses off their hands.

Service Industries

§Allows for a full retail value tax deduction for surplus time, space, unsold seats or service-related offerings.

§Provides a creative way for staff to give to their nominated charities without the need for time-off or cash from their pockets.

§Can help fulfil a company’s philanthropic, environmental and/or social welfare goals and translate into goodwill.

General Benefits for Businesses

§Businesses who donate trade credits receive the up-front tax benefits at the time of donation – even though they may only earn the trade credits at a later date.

§Allows businesses to tie their giving to your sales or customer activities without spending any additional cash to do so.

When a business makes a donation to charity it comes out of their profit margins. In-kind donations are a way to reduce their idle production time, increase staff loyalty, create goodwill and publicity and access tax deductions.

What is Ormita

Ormita acts as a clearinghouse for the trade of excess capacities, goods and services through a combination of online e-commerce, clearing, 24 hour telephone brokering and independent licensees and brokers.

At the core of the business is an electronic trading platform that allows participants to trade their excess capacity or unsold time for:

Rather than promoting direct trade between participants the Company brokers trades through a centralized marketplace.

1.Transactions are recorded in a centralized “ledger” which records the value of the items purchased (debit) and sold (credit) – much like a clearinghouse does for stocks, or a commercial bank does for checks.

2.This ledger system utilises a “trade credit” as a method of accounting with 1 Trade Credit = $1.

3.Just like any brokerage firm, Ormita receives a cash commission on each transaction.

4.Non-profit donor and recipient transactions are not subject to this commission as they fall within the boundaries of the Company’s Corporate Social Responsibility Charter.

Trading “In-Kind” Donations

Ormita provides non-profit organizations the option to exchange their donated goods or services with other organizations in return for things that they need.

Instead of trading goods and services directly, a non-profit organization will list their donated product with Ormita and sell it to another organization for “Ormita Credits”.

Ormita Credits record the real market value for the products or services acquired by each organization. 1 Ormita Credit = $1 for the sake of book-keeping.

These Credits can then be used to acquire other market-value goods or services without the need for cash.

Do you want to know more about the Ormita Commerce Network or become a member, joint venture partner or barter exchange franchise owner? Visit our website at www.ormita.com or www.ormitacorporate.com.

“Unsold appointment time, empty hotel rooms, unsold venue passes, unfilled advertising space, rapidly depreciating stock, idle production time, vacant seats, end-of-line items and oversupplied products are known as “dead capital” and there is approximately 9.3 trillion dollars of it world-wide.”

The Ormita Platform allows business owners to exchange their surplus time, products and/or capacity for items they would otherwise have purchased using cash.

Ormita is an International Commerce Network (a Barter or Trade Network).

Ormita is an amazing business opportunity for you.

The Ormita Difference

·Modeled after the Swiss WIR

·Participants commit to a regular buying cycle where they will offset a fixed amount of monthly expenses against new revenue (typically $2000 – $4000 per month).

·NO Joining Fee – Members only sell when they have something to buy (commit to a Buying Schedule)

·Buying Schedule Fee is charged only after the new member agrees to the trade offsets found for them found by their Client Director and Broker.

·NO Monthly Fee – There is no monthly fee is a member meets their Buying Schedule commitments (and pays their monthly commission charges via credit card).

·NO Fee When Purchasing

·7% Fee When Selling (of the total transaction value)

·Sellers receive part of any sale they make in cash – thereby covering taxes, their hard costs and our administration fees.

·Interest FREE Credit Line

Ormita is the only exchange that focuses both equality and emphasizes on the buying needs of it’s participants before they are allowed to become a member. By purchasing using their own products or services instead of cash, our members can automatically reduce the net cash cost on anything they buy (the difference between the cost to supply a new customer versus buying goods out of existing cash income).

Ormita has an industry-leading trading platform; providing an eMarketplace with full online banking to its members.Each member has a support team that includes their Broker and Client Director to facilitate and manage participation. Transactions include applicable GST or Sales tax.

Depending on the business type, a company may receive a portion of their sales in cash (as defined in our Equity Program). This allows the vendor to immediately recover a significant portion, if not all, of their cost of goods sold and applicable taxes; providing the overall membership with greater availability of products and services at the right price.

There are NO fees for qualifying Media Providers and Non-Profit Organizations and Ormita promotes an aggressive Affiliate Program.

Do you want to know more about the Ormita Commerce Network or become a member, joint venture partner or barter exchange franchise owner? Visit our website at www.ormita.com or www.ormitacorporate.com.